What is the Crypto Role in the War?
First of all, I need to say, I am really sad to see that we still use wars to solve our problems and disagreements. We have made so much progress in technology, but in cultivating human values, such as compassion and respect, we have a lot to advance. I hope the world finds peace again.
Let’s go to the subject of this article, what is the role of crypto in this terrible situation?
Global Donations
Crypto is fast and global. With a click, you can transfer money worldwide without any bureaucracy. In less than a minute, the money is transferred. It has the perfect fit to be the global donation platform.
It is incredible to see a government fundraising with crypto. The Ukrainian government set up crypto addresses to receive BTC, ETH and USDT from donations.
In another initiative, some big crypto projects are supporting the fundraising of Unchain Fund to help Ukrainian people, by quickly distributing money for humanitarian needs.
One advantage of crypto transactions is that they are transparent. This can help in verifying how the funds were used.
After these experiences, I expect we will see more crypto donations platforms being formed to solve global and local problems.
Resilient Store of Value and Alternative Currency
In a war situation, banks and financial markets are more vulnerable than crypto networks, which have their computing power distributed and decentralized around the world. Banks can suffer from sanctions, cyberattacks and physical attacks on their building and servers.
Crypto provides freedom to move your assets with you, without depending on banks. You do not need to stay in lines to withdraw your money from the bank or an ATM. In a war, you need to move quickly and cannot lose time.
BTC and ETH have liquidity and are accepted worldwide. The private key is yours and the safe box is secure by a huge computing power resilient from cyber and physical attacks.
Another way to store value and be protected against crypto volatility is using stablecoins. The only problem of centralized stablecoins, such as USDC, is that you take the risk of having your assets frozen. I believe decentralized stablecoins, such as Fei Protocol, have a role to play in a more censorship-resistant portfolio. For more information about this category, check out the article here.
Western countries are imposing strong sanctions against Russia, freezing their central bank assets in foreign currencies and removing some Russian banks from SWIFT, a system for international transfers. This shows how dangerous it is to rely most of the assets on foreign currencies controlled by other nations.
It is very valuable to have an independent and neutral monetary system, such as Bitcoin. I expect that Bitcoin will be more considered by central banks from now on as a more resilient asset.
Russian people and companies will probably use more crypto as the traditional finance sector closes the doors to them.
DAOs
DAOs are the new organizational structure for global human coordination. How to work together with many people instantly without borders?
In the first days of the war, we saw the creation and mobilization around UkraineDAO. Their goal is to raise funds to donate to Ukrainian civilian organizations that help those suffering from the war.
The DAO can connect those that can help financially and donate time with those needing help in Ukraine or that have family there. The DAO can also be a recruiting mechanism for developers that could help in the cyberwar. There are many available roles to play in this DAO, from legal to marketing.
Even though it is challenging to build a cohesive and coordinated community, from these efforts will probably emerge many lessons learned on how people can better organize themselves. What is the role of social capital to bring credibility? How to select / onboard new members of the community? There will be many questions to be answered.
I hope crypto technology can help us to build a more peaceful world, where we respect different cultures and work together globally. I am optimistic about the future of DAOs.
Please note that this letter is not intended as financial advice.